View 12/1999

The Contrarian's View

Vol. XIV, #5, December 20, 1999

The Contrarian's View is published 11 times per year on a mostly-irregular schedule, and the views expressed are those of the author and editor, Nick Chase. Because nobody can predict the future, results of past suggestions or recommendations are no guarantee of future results. Material in this publication may be freely quoted provided proper attribution is given to its source. Subscription rate: Free on the Internet through the World-Wide Web service at Assumption College. Using your favorite Web-browsing program, Open URL http://nick.assumption.edu. Mailed paper subscriptions, one year for $39 to The Contrarian's View, 132 Moreland Street, Worcester, Massachusetts 01609. There is a limit of 50 paid subscribers at one time; please check for availability before sending any money. Sorry, Visa and Mastercard are not available. Overseas subscription rate, U.S. $54. Unsolicited material sent to us by UPS or by courier other than the postal service is refused and returned to sender! Phone: (508) 757-2881

Y2K: WHAT I EXPECT

My efforts in covering the Y2K problem for the past two-and-a-half years have been largely focused on cutting through the hype and the self-serving comments of people trying to make a buck out of the situation (as either trying to sell solutions, or pooh-poohing the problem) to determine the reality.... would it be fixed in time, with only minor problems cropping up, or do we face a more serious threat to our lifestyle?

Did I succeed? No. The Y2K problem lends itself to obfuscation, distortion and deception. Any enterprise that said it would fail in 2000 would be out of business in two weeks, as its suppliers and bankers would (rightly) regard it as too risky to do business with. And if government felt Y2K were a serious problem, it could never let on, or it would be admitting its own ineptitude and lack of foresight.... better to keep the sheeple asleep. (Never mind that we, the people, are supposed to be masters of the government rather than the other way around.)

So, if you're a business, if you're Y2K-compliant or were "on track" to make it in time, you could speak up; otherwise, better to keep your corporate mouth shut. For politicians and bureaucrats, pretend you're on top of the problem and, as the deadline approaches, claim you're ready whether or not it's true. Most all persons in authority rightly perceive that the public does not want its "New Era" illusions shattered.... if that's going to happen, it will come soon enough.... so there's no need to upset people prematurely with an advance admission of failure.

We have only a few days left until the Y2K failures kick in much larger quantities, and I feel only slightly more illuminated than I was when I began my quest almost three years ago. Even though I regard the self-reporting of Y2K-readiness as little more than a propaganda campaign, in the process of digging for the facts I have developed some opinions of what I think will happen in 2000.... but these are intuitive, "gut-feel" opinions from a mixture of statistics, personal tales (as carried in the Y2K Quotes section) and "geekvine" rumors.

What is the "bright" side of Y2K? Well, the dire predictions for past choke points.... January 1, 1999 - one year ahead, April 1, 1999 - NY and Canada begin fiscal years, July 1, 1999 - new fiscal year for many organizations, August 22, 1999 - GPS rollover, September 9, 1999 - "9999"=end-of-file, October 1, 1999 - new Federal fiscal year.... none of them came true. Sure, there were scattered problems, but they were worked around or had already been fixed in the process of repairing code for the "main event". Having the pessimists proved wrong for these earlier dates may indicate that the pessimists will also be wrong for January 1, 2000 and beyond.

Further, a late-November poll by Ed Yardeni and CIO magazine, where the respondents (mostly MIS managers) could reply anonymously and therefore hopefully truthfully, shows that about 92% of the organizations they represent are ready, or will be ready, on time. Those that are behind are only a few weeks behind, and presumably will be able to work around the failures until they finish their Y2K repairs. If we allow a margin of, say, 5% for outfits than can implement workarounds, then the Y2K failure rate (organizations going under or severely impaired) will be 2% to 4%.... a little more than a "bump in the road", perhaps, but small enough that it can be glossed over by the prostitute press and ignored by a new-era-worshipping public.

In my own job, and at my friends' jobs, as far as we can tell, the situation is under control. There is a natural tendency to assume that if we're doing OK in our own Y2K repairs and contingency plans, then everybody else is, too.

Finally, the failure rate for imbedded chips (of those systems tested) seems to be in the range of 1/2 of 1%, much less than the 3% to 5% that was feared.

Great news, right? No problemo, right? A "bump in the road", right?

Well, not quite. Consider the darker side:

€ The prior choke-point dates (except GPS) were accounting-system failure points to observe. Accounting-system failures are the easiest to internalize (keep buried within the organizational structure); they don't necessarily affect the shipment of goods or delivery of services to the customers, though they will bring an outfit down if they get out of hand.

€ For the last-expected choke point ( not mentioned above), accounting-system failures due to the "Jo Anne Effect", a lookahead into next month, January "00", we are seeing reports of failures rolling in, though not enough to reach critical mass and awaken the public. Even so, these are being overshadowed by software fixes rushed into place, to beat the deadline, which were not adequately tested. For example, Medicare is beginning to crumble.... the doctors' computers don't communicate correctly with the insurers', about a 20% failure rate..... this indicates to me that Medicare will have problems for at least a few weeks into 2000.

€ In companies where entirely new systems have been installed to combat Y2K, there have been some conspicuous partial failures.... Hershey and Whirlpool come to mind.... where the companies have suffered because of screwed-up inventories and deliveries. Granted, all-new IT system implementations are frequently buggy; it's just that with the immovable Y2K deadline, more of them, and less-well-tested systems, are all coming online at the same time. Management does not have the option of moving the project deadline further away until all of the major bugs are found and fixed.

€ In the Yardeni/CIO poll, one-fifth of the respondents work in finance or insurance, a higher proportion than for the economy as a whole; and we already know that banks, insurance companies and Wall Street are the best-prepared. Also, the respondents work for medium- and large-size companies (generally thought to be much better-prepared than small companies) and for U.S. or multinational firms (no reading on the progress of foreign businesses from this poll).

€ Does anybody remember "Done by December 31, 1998, with a year for testing?" Never happened. Y2K is a history of missed deadlines.... March 31, then July, then September 30, then October, then November.... now code is being slammed into place in mid-December, with virtually no time left for integrated testing, by up to on-fifth of the companies in the Yardeni/CIO poll. Typical IT project. Some of these outfits won't make it because the testing wasn't thorough enough, even though they think they are (or will be) ready.

€ Industry leads government in repairs. If businesses achieve, say, 95% compliance, where does that leave the Feds? About two-thirds to three-fourths compliant, if we're lucky. And, as a whole, the states are behind the Feds.

€ There is still a big discrepancy between the rate of progress that's reported on the "geekvine" and what organizations are reporting publicly. Essentially, the geeks are calling the pointy-haired managers liars.

€ The U.S. is the acknowledged leader in Y2K repairs, and even we didn't make it. What does this say about foreign countries? Canada, United Kingdom, Australia, New Zealand, Israel.... probably less than 90% remediated. Mexico, most of Europe, Japan.... 75% to 85%. Italy, Central and Latin America, China, India, most of Southeast Asia.... 60% to 70% at best. Africa, Muslim mideast, Russia, Pakistan, Indonesia, Bangladesh.... basket cases. Have the bozos who think that Y2K is a hoax figured out yet that we live in a world economy?

€ Though the imbedded-chip failure rate may be relatively low, process-control systems typically incorporate many (sometimes hundreds) of chips and therefore have a higher failure rate.... certain Foxboro systems, for example, had a 15% failure rate when tested.

€ It makes a difference where the failures occur. For example, if the nation's air traffic operates at two-thirds of its usual capacity because of Y2K, the economic fallout will be severe, even if every industrial, financial and service organization were fully compliant. (Think FedEx.) If chip failures take out a third of the world's oil refineries, we have an energy crisis, even if all of the world's enterprise systems function flawlessly.

€ Y2K behavior is unpredictable. Nobody knows in advance (except possibly a handful of people closest to the machinery) what is likely to fail; if it does fail, in what way; and how long it will take to repair or work around. It is this "we don't know" factor that entices people to prepare for a situation worse than what they realistically expect to happen.... they're just buying themselves plenty of insurance.

€ Y2K is systemic. Organizations rely on each other to produce their goods and services. If a supplier in the chain breaks, the entire chain is broken. (Think just-in-time inventory, made possible by modern computer-tracking systems.)

€ Y2K is expensive. In the U.S. we will have spent about $100 billion to (try to) fix it; worldwide, about $600 billion. An estimated additional $200 to $400 billion worldwide will be spent after the fact, for "fix-on-failure" and to clean up the messes created by the failures. And then there's the trillion dollars of lawsuits waiting to be filed when some of the systems collapse. None of these expenditures improve productivity in any way (except for replacement of outdated gear with newer and more efficient equipment as part of the repairs). They are just expenses incurred to stay in business - like paying taxes.

€ Y2K is a psychological hazard. The public has been conditioned to expect little or no inconvenience from the rollover. Should Y2K turn out to be the widely-expected bump in the road, no problem.... life will go on as usual. Should it be worse, people will suddenly realize that life will not proceed as usual.... that perhaps they should have been better prepared. (The "collective dope slap", as Paul Milne calls it.) Meanwhile, the people in authority who should have warned us, but didn't, will be exercising the escape hatches in their weasel-worded statements and saying "We told you so", which won't make the public feel any better.

€ In the U.S., Y2K arrives with a financial bubble exceedingly ripe for a pin to pop it.

The three major threats to our way of life from Y2K bug are, I think: economic degradation and inefficiency caused by failing enterprise systems, particularly billing, accounting and inventory-tracking systems; interrupted manufacture and delivery of goods caused by failures in just-in-time systems; and reduced energy availability caused by chip failures, especially in the petroleum industry. The threats appear to be greatest in oil, chemical manufacturing and transportation, and more so overseas than in North America. I am not particularly worried about financial systems (in the U.S.); they should be able to flawlessly track asset-value shifts as the troublesome areas trigger economic decline.

As for the extent of the decline, here are the odds I estimate (from Y2K alone, without a market crash factored in):

€ None: 0% (Y2K is already having an impact!)

€ Bump in the road, rapid recovery, economy chugs along as before: 5%

€ "Ordinary" recession (like 1990, 1982): 25%

€ Severe recession (like 1973-74, Japan in the 1990s): 35%

€ Depression (like 1929-32): 30%

€ Worse than the Great Depression: 4-1/2%

€ Devolutionary spiral - society collapses like the decline of the Roman Empire into a new Dark Age: 1/2 of 1%

€ Stock market doesn't crash: 0%. (Stocks will crash, even if Y2K should be a non-event.)

I'd say these estimates put me somewhere in the middle of the road, somewhat more pessimistic than Ed Yardeni is (publicly), but not quite as pessimistic as Ed Yourdon. Maybe a 4 or 5, on a scale of 1 to 10.

Now, let me make some hopefully-intelligent guesses about how I think Y2K will unfold:

There has been some speculation that the public may panic at the last minute, in the final week of December. Ain't gonna happen, in my opinion. The public is going to hit the Y2K wall fully asleep, thanks to truly abominable reporting by the mainstream media. It appears the Fed and banks have more than enough cash on hand for the one likely occurrence, heavy cash withdrawals at the end of December "just in case" or for serious partying. (If stocks crash in the last week of December, it won't be due to Y2K.)

As we cross into 2000, the most important thing about Y2K, in my opinion, is to assess whether the power will stay on or go out for some length of time. If it stays on, life may get messy but the situation is, for the most part, not life-threatening. For those computer systems which fail, efforts can continue to repair them.

If the lights go out for more than a day or two, life can get pretty uncomfortable pretty quickly, especially in the cold northern states. The generators that keep communications, water and sewage flowing won't be able to operate indefinitely. And of course, after the power comes back on the computers still need to be fixed.

In our area (central Massachusetts) I think the power will stay on, but I expect it to be "dirty".... full of spikes, surges, brownouts, the stuff that burns up motors and computers' power supplies. I don't expect to see this on January 1 or 2, the weekend, but problems may appear when people return to work on January 3. In other areas of the country, I don't know; hopefully you have been keeping tabs on utilities' progress where you live. In other countries, especially in the Third World, I expect to see massive, lengthy rolling blackouts.

The embedded-chip problem is still a big unknown to me; I really don't have the expertise to accurately estimate in advance the extent of failures. But we can say with some certainty that chip date-failures really are a 1/1/00 problem; if control systems are going to conk out, they'll do it on New Year's Day (or as soon thereafter as the equipment is turned on). We should know pretty quickly how serious the chip-failure situation is. I am most worried about petroleum refineries; I think it's likely at least 10% of them will shut down, maybe up to a quarter of them. A 6% drop in (imported) oil triggered the 1970s energy crisis, which the government aggravated with its price-fixing.

By January 4 or 5, 2000 (with the extent of chip defects mostly known, and assuming it's not extensive), there will be an enormous collective sigh of relief as the impact of Y2K will appear to be much less to people than some pessimists had predicted. People will go about their usual business; confidence will remain high.

Then the problems will begin.

By mid-January, the failure of "fix-on-failure" will be evident. Systems which couldn't be fixed in two or three years' time certainly won't be fixed in two weeks. Corrupted data will be spreading throughout enterprises because there was insufficient or no integrated testing before the code was slammed into production. Inventories will be messed up; delivery of goods will be erratic. Prices of goods (especially energy) will rise and shortages will appear. Government "services" will be the most messed up. People and companies who stockpiled for Y2K will find their supplies depleted.

In some specific areas: I wouldn't be surprised to see air traffic moving at three-fourths normal capacity; air controllers are already stressed out from overwork, and the new FAA systems are buggy as hell. Medicare will have serious problems paying doctors. Mail deliveries will slow down. Welfare and unemployment benefits will be screwed up. Many people will go unpaid when payroll systems die (particularly in big-city governments). Oil refining capacity will shrink, and gas prices at the pump could go up by half. The IRS won't be able to process any but the most straightforward tax returns, but you won't know it because they won't tell; they'll just send you whatever you asked for as a tax refund. Countries overseas will be in much worse shape, and world trade will shrink.

By late January, Y2K will have introduced so much uncertainty into the system that interest rates (particularly on corporate paper) will soar; fears that almost anybody can unpredictably go out of business will be realized as a few Fortune 500 companies go bankrupt or suffer "quickie" mergers. Banks will become nervous about the quality of their loan portfolios. People will spend a lot of time trying to straighten out messed-up bills they've gotten.... and won't pay them until they're right. Corporate cash flows will be squeezed.

February and March will bring more of the same.... by then, it will be obvious to all but the most incurable optimists that a Y2K-induced recession is unavoidable. Consumer confidence will plunge. Layoffs will increase.... somebody in your neighborhood will be newly out of work. Hiring freezes (except to fix Y2K) will be widespread. You will fear for your own job. You will retrench, naturally. So will your friends and neighbors. GDP will shrink.... the recession has arrived. Of course, the stock market will have long ago crashed.

Then will come the debt defaults. If we are going to spiral downwards into a depression, this is what will do it, in the spring of 2000.

By June of 2000, most of the Y2K failures will be behind us; they'll be a known quantity. But by then, we'll have a different set of problems.... collapse in asset values; bankruptcies; a massive shift in the public's expectations for the future.... my crystal ball grows cloudy....

Above all, I expect to be surprised. Y2K fallout is, ultimately, unpredictable. It is this unpredictability (Where will it strike next?) that will unnerve people.

Could I be wrong about all of this? I sure hope so! I kind of like life the way it is. Only a masochist would wish for a depression. I'll gladly trade having Alan Greenspan keeping the stock-market bubble inflated for another year or two (and be wrong for even longer about the impending crash of stocks) for a no-impact outcome to Y2K. If Y2K should, against all my expectations, turn out to be a non-event, you'll see me leading the cheering squad.

But I don't think I'm wrong, unfortunately.

One thing Y2K will do, no matter how it turns out, is tell us a lot about the quality of society. The official line, from government, businesses and the media is, "No problem". If indeed, Y2K turns out to be only a minor inconvenience, then the happy-face reports we have recently been getting will in fact have been truthful. The core of society's foundations.... that people deal with each other honestly.... will be validated. Validation that things are still basically OK (in times of peace), as they have been since Biblical days, in spite of the daily blood and gore the media feed us.

On the other hand, if Y2K is, as I think, a serious problem that has been papered-over by the powers that be, then we were lied to big-time. It will mean that the institutions we as a society have created.... businesses, government, media.... were fundamentally dishonest with us at a time and for a situation which was [will be] highly damaging and possibly life-threatening. I can't speak for you, but I don't think I was put on this earth to contribute toward building a society whose institutions lie when it is essential the truth be told. It would seem to me we should rethink the utility of the institutions we have constructed.... at a minimum, get rid of the people who lied to us and replace them with honest people.

Now, for more practical matters in this last issue before we cross the Y2K boundary. Should loss of power interrupt the writing and production of The Contrarian's View, paid subscribers will have their subscriptions extended accordingly. If I am able to prepare The Contrarian's View and publish it electronically, but I cannot mail it because the postal service is screwed up, your paid subscription will be extended and I will also mail you the back issues when reliable postal service resumes.

For readers over the Internet: I will be shutting down the "nick" and "fennel" web servers in the early afternoon of December 31, 1999, and will not be turning them on again until midday on January 3, 2000, assuming the power is stable. If we're getting messy power, the wait will be longer. As far as I know, the mirror site (www.fiendbear.com) will be operational during this period.

"12/49"

A few days ago I received my new bank ATM card. Good thing, I thought, as it was getting close.... the old card was due to expire on the last day of "12 /99", and in fact I had inquired at the bank at the beginning of the month, Where was my new card? Time was running short.

The new card has an expiry of "12/49". I smiled, recalling Gary North's wonderings about his card.... which will expire first? 1. The card. 2. The bank. 3. Me. I put the card in my wallet, for testing in an ATM before I cut up the old card.

When my wife got home and examined her card, she called me: Did you notice anything funny about the new card? Sure, I said, it expires in December of 2049. Guess the bank thinks I'm going to live a long and productive life.

Then I went on to explain that "12/49" is a pretty good clue that the bank has adopted a stopgap measure known as "windowing" to resolve its Y2K problems, because it didn't have enough time to properly overhaul the code. (If the code were properly fixed, the bank could issue cards that expire in "02", "03" or "04", the way Visa and MasterCard do.)

In windowing, a boundary is assigned between 20th century and 21st-century dates; for example, "50" through "99" mean 1950-1999, and "00" through "49" mean 2000-2049. The bank can then use an "offset" in its calculations; for example, an offset of 45 means, 49-45+1999=2003, the card really expires at the end of 2003. The offset allows the bank to go all the way back to 1955, the embryonic beginnings of computerized banking, before it erroneously calculates a negative-signed year (as opposed to calculating a negative-signed year in 2000 with two-digit math, as it might have done without the windowing). This windowing technique allows historical (two digit-year) data to be used without modification.

I'm hoping the bank has completely overhauled its code by 2003 (or whatever).... you can see why Y2K problems might be ongoing for several years, if the stopgap measures fail because organizations don't meet the extended deadlines.

QUOTES FOR THE MONTH

As my family met for Thanksgiving dinner, several of my relations and friends asked me about the stock market. Everyone (besides my parents, who know better) is mixed up in the stock market. At this point, I don't even bother to tell people what I believe is going to happen. No one wants to hear it and there isn't anything you can tell anyone. Folks believe that we are in a New Era and they are completely unaware that the action that they are seeing now is a severe aberration. - Marc Sexton

The truth of the matter is that the Fed has now orchestrated enough bailouts over the years that financial journalists, Wall Street, main street investors, politicians and businessmen are convinced that the Fed stands willing and able to protect the bull market and the economic boom. This, the ultimate moral hazard, can only be regarded as a monumental failure in central banking what will be the sad legacy for the Greenspan Fed. - David W. Tice

I love the fiat money system. It's great. I love the fact that my 18-year-old brother is able to have 12 credit cards and have the ability to charge up to $100,000, all on a part time job paying $8.25 an hour. I love the fact that I am able to borrow 125% of the price of my new house. Borrow to buy two cars, spend 120% of my annual salary yearly. Take two vacations a year on my credit cards, and watch as my stocks increase in value 15-20% which allows me to spend 120% of my annual income yearly. I love it. I hope it never stops. I want 30% returns on my stock investments so I can spend 150% of my annual income and take 3 vacations and buy 4 cars. Send my kids to college on borrowed money. Borrow for my retirement, go into debt as far as I can get on fiat money. As you know, it's only paper promises to pay a debt. All good things must come to an end. But not this time. No!! things have changed. I can always continue to borrow and I never have to pay. Just as long as my stocks are okay. Up, up, up and away. - "Lindy" Lindgren

Inarguably, the past five years have been one of history's great episodes of credit excess. Leading the charge since the beginning of 1995, the "Big Three GSE's" have mushroomed their balance sheets from $618 billion to $1.448 trillion at the end of September. This is a virtually unfathomable increase of $830 billion, or 134%. Today, both Fannie Mae and the Federal Home Loan Bank System have total assets exceeding $500 billion. In less than five years, Fannie Mae assets have increased 102%, Freddie Mac 244% and the Federal Home Loan Bank System 122%. Over this same period, money market fund assets have expanded from $628 billion to about $1.57 trillion. Broad money supply, or M3, has increased from $4.3 trillion to $6.4 trillion. All the same, the Fed sits back, relaxes and chatters about the "new era." This whole situation is truly unimaginable. - David W. Tice

[The price rise of] VA-Linux systems is incredible.... their market capitalization puts them in the league of a Fortune 500 but they have the revenues of a very small business. How can this be? They take white-box machines, burn a free pattern of bits onto the hard disk, and what? This puts them in the same league as Ford Motor Company, General Foods, Hilton, or NBC? ....Based on the above, I should incorporate Lin-uxDC.com, "Our mission, making Linux the standard for the Internet Commerce." Gen up a couple hundred million shares of stock, offer 1/4 at oh, $50/share, keeping the rest for myself and employee options.... VI, this is an editor? This is all too strange. - Cory Hamasaki

I have no idea why the market is as high as it is, or why it seems to keep going upwards, based on high-tech ".com" companies that have no profits, minuscule revenues, and little of substance. When you add Y2K into the equation, I thought that investors would be heading for the sidelines as we began the fourth quarter of 1999. But they didn't, and they still haven't -- at least, not yet. Maybe they'll continue to be so enthused about the ever upward nature of the Dow Jones average and the Nasdaq index that they'll hang in, right to the bitter end. And maybe if they want some extra cash for Y2K, they'll do it by taking a cash advance on their credit cards. None of this makes any sense to me, but that's probably why I'm a software engineer rather than a stockbroker or a banker. - Ed Yourdon

To us and to any serious analyst, it is patently clear that the Federal Reserve has lost control of the monetary system. This, undoubtedly, jeopardizes the future health of the dollar, our financial system and the economy, both at home and globally. The soundness of money is of momentous importance for the stability of the world and to our standard of living here at home. We strongly urge the Federal Reserve move aggressively to get this situation under control. - David W. Tice [Nick's comment: They're not listening to you, David]

With the Fed having pumped up bank reserves over the past 3 months at an annualized rate of around 50% due to Y2K liquidity concerns, the banks are simply doing what they do best using the additional reserves to support more lending and hence the creation of more deposit currency. During the most recent week for which data is available (the week commencing 22 Nov 99), the total quantity of US Dollars increased by $35.8B! If the world is able to navigate into the next millennium without a major disaster, the Fed will act immediately to restrict the rate of money supply growth. This is the key problem for the exuberant stock market the more uneventful the Y2K transition, the less money will be available to support a continued surge in stock prices. - Steve Saville

The money supply has gone through the roof and the increase, adjusted for inflation, is the biggest in the nation's history... The Fed may be flooding the nation with cash because of jitters among central bankers that the Y2K computer bug could do more damage to the financial system than most people expect....All the signs suggest Greenspan is scared to death about Y2K and he thinks that this is a cataclysmic thing that could bring the world economy down. But again, it may reflect Greenspan's thinking that the stock market is on a very unstable foundation because of valuations and Y2K might be the trigger that could keep it from coming down softly.... I just don't have another excuse other than Y2K to imagine why the Fed would flood the system, unless there is something that's happening behind the scenes that we don't know about. - Don Hays [president, The Hays Market Focus Advisory Group]

Lets see. If you add the Fed cash injection (against a bug, Pasteur would be proud) to the 3/4 TTTTTrillion US dollars worth of T-Bills sold over the last two months, why, it comes to almost a full TTTTTrillion dollars!!!! The cash gave us annualized rate of 15%, and the T-Bills give an annualized rate of 24%. Is it any wonder that the markets keep climbing? - Mitchell Barnes

Why is one non-redeemable chit "stronger" than another? The answer leads us again to the concept of conquest. Admittedly, any fiat currency is as "good" as any other; namely, no good at all, or extremely good, depending on whether you're the issuer or the user. An aggressor nation, however, wishes to impose its own currency upon anyone it can; and if that aggressor-nation is also home to a productive people, blessed with abundant natural resources, it's not difficult. Dollars are preferred to [Brazilian] reals because you can buy more good things with them, and the world's bankers take the dollar more seriously than the real. Dollar "aid" is a little like drug dealing: give the stuff away to potential victims (a sort of narcotic Marshall plan) and once they're hooked, they're hooked. The bankers who have the most people paying them interest win. - Paul Hein

This is just speculation, of course. But wouldn't it be interesting if it turned out that Alan Greenspan was actually still a devotee of Objectivism? Maybe he's doing it on purpose, with the following intent: 1. Ruining all the people who are so stupid as to "invest" in companies with no prospects of ever making a profit, much less paying a dividend; 2. Getting all the gold out of the hands of the central banks and into the hands of the conscious members of the public by artificially lowering the price via gold leasing; and 3. Destroying the fractional-reserve banking system by making a bank run inevitable. The result of these three occurrences will be the establishment of a system of sound banking in which the capital will be owned by those who had the foresight to understand what was going to happen. What more could an Objectivist wish for? - Steve Heller [Nick's comment: No way, but don't I wish!]

Before the storm broke we were steadily gaining in prosperity. Our wounds from the war were rapidly healing. Advances in science and invention had opened vast vistas of new progress. Being prosperous, we became optimistic all of us. From optimism some of us went to overexpansion in anticipation of the future, and from overexpansion to reckless speculation. In the soil poisoned by speculation grew those ugly weeds of waste, exploitation, and abuse of financial power. In this overproduction and speculative mania we marched with the rest of the world. Then three years ago came retribution by the inevitable world-wide slump in consumption of goods, in prices and employment.... one part of the theory upon which the Reserve System was founded was tested the idea that business could be activated during the depression by Federal Reserve credit expansion and lower discount rates. Subsequent events showed it had little effect in that direction. Credit expansion certainly proved to be an effective method of promoting a speculative boom when people were optimistic. But when they were pessimistic, it had no effect whatsoever. - Herbert Hoover

People have learned, as that old Englishman Thomas Macaulay warned they would, that they can loot the public treasury. Broadly speaking, American politics amounts to a frenzied feeding at the public trough with individuals and groups shouting and elbowing each other to get what they believe is their rightful share of loot. Joining the rabble are all those various groups with an itch to run other people's lives and who want the government to be their leg-breaker and enforcer. - Charley Reese

Our history is based on each generation living better than the past. I don't think that will happen with my generation. The system is out of control and there isn't anything that I or anyone else can do about it. - Ronald Burton [age 24]

The most significant aspect of the Seattle protests is that they embodied the widespread fears and anxieties of millions of Americans who do not share the prevailing assumption that these are the best of times, and who in effect represent America's unrecognized third party, made up of those so disgusted with the system that they have even given up on voting.... The unchecked power of the few over the economic and political life of our nation -- indeed, over the very lives of average Americans -- was the target of both the turn-of-the-century Progressives and the end-of-this-century's protesters. If anything, the arrogance and incomprehension are even greater today. - Arianna Huffington [Nick's comment: This corrective move is likely to accelerate after the stock market and "new era worship" crash, as they did in the 1930s.]

We live in a time our parents are too busy for their kids, our schools treat them as inmates rather than seeds of hope, our universities train them in narcissistic ambition, our television teaches them post-apocalyptic guerilla tactics, our president normalizes psychopathic behavior, and then our journalists and "experts" teach them that if they rebel or are anxious about all this, it is their own fault and they are "ill." - Sam Smith

I am confident and sad that, when future historians write about the decline and fall of the United States, the failure of the press to inform the people will be counted as a principal cause. - Charley Reese

There's a whole journalistic-industrial complex dedicated to keeping newsprint, TV screens and radio waves clean of destabilizing scoops damaging to corporations or the state. - Alexander Cockburn

CLINTON QUOTES FOR THE MONTH

And so, Mr. President.... we learned yesterday that you were coming [to Worcester, the financial backwater of America, for the memorial service for the six firefighters who died fighting a warehouse blaze]. A spokesperson for Congressman James P. McGovern's office in Washington, D.C., called the newspaper in the morning to say that Mr. McGovern would be at the fire scene to make an announcement "regarding the President's schedule". Of course, the spokesperson simply could have said there and then that you were coming, but that isn't how politics works. Better to get the congressman on television in front of the smoking building, speaking to a battery of microphones, with the front row of media people genuflecting so that the cameras behind them can get good shots. - James Dempsey

I think the Chinese will in fact be bending over backwards to make sure that they run it [the Panama Canal] in a competent and able and fair manner.... They'll want to demonstrate to a distant part of the world that they can be a responsible partner. And I would be very surprised if any adverse consequences flowed from the Chinese running the canal. - Bill Clinton [November 30, 1999]

The record is now crystal clear that NATO and the Clinton administration deliberately lied about Serbian atrocities in Kosovo to justify their intervention in a low-intensity civil war in the Balkans. It turns out that as few as 2,108 people were actually killed in Kosovo over a period of months leading up to and including the period of heavy bombardment of Serbia by NATO forces. This is hardly "genocide," as it was billed by Clinton... - Joseph Farah

She's gone. There may be some phony joint public appearances, but Hillary is out on her own now and that's the way she wants it. - Arnold Watson [long time acquaintance of the Clintons]

Y2K QUOTES FOR THE MONTH

Silence, traitors. There have been no problems related to Y2K. There will be no problems related to Y2K. The disruptions, undersupply and inflation that will occur will be due entirely to inclement weather, computer viruses created by hostile governments, international profiteering, terrorists, perfectly normal hardware and software failures, hastily-installed replacement systems, global economic conditions and good old-fashioned human error. We have spent a gazillion dollars fixing this, there are no Y2K problems. You are in error, citizen. If the power and TV stay on for an hour after rollover, this will be the line we will be fed. And the vast majority of people will eat it right up and ask for more, even if the shelves stay empty. Get used to that idea. - Colin MacDonald

As it stands, the government is gambling that Y2K will cause virtually no problems at all. This is a bad bet, based on the available evidence. - Scott Johnson

As of today [December 14], 99.9 percent of the government's mission-critical computer systems are Y2K compliant. They have been fixed, tested and certified as ready for operation on January 1, 2000. We have met the challenge of making sure that the federal government can continue to serve the American people as we enter the next century. - Bill Clinton

Agencies have completed work on 6,167 of 6,175 (99.9 percent) of their mission-critical systems. The 8 remaining systems are scheduled to be finished in December. Agencies have completed work on over 97 percent of non-mission-critical systems and most expect the remaining systems to be compliant in December. Agencies have worked with their counterparts in State and local governments to assure the delivery of 43 programs that directly affect people (such as student aid, disaster relief, and Medicare). As of this report, 30 of these programs are tested and ready.... Agencies have fixed 283 of 284 data exchanges (99.6 percent) with the States to enable States to administer Federal programs such as unemployment insurance and child support enforcement. Agencies have fixed the vast majority of data exchanges with the private sector, such as banks and other financial institutions, other Federal agencies, and other government entities. The air traffic control system is ready. - OMB progress report on Y2K [December 14, 1999]

When I first began to focus attention on this issue four years ago, there was little planning even underway except at the Social Security Administration. Now, enormous progress has been made. As a result, it appears that any computer disruptions will be relatively limited and relatively short. At least, that is what the agencies have reported to Congress. In a few days, we will all know for certain. - Stephen Horn

It is the dilemma that governments are in BECAUSE the screwed up, initially. Instead of having a happy-faced attitude, they should have understood the gravity of the situation and taken serious steps to prepare their populations. They would have had two years to prepare them and any 'panics' could have been dealt with much more easily. But, they opted to act like assholes. And now, the situation is simple. No matter what the actual state of affairs, they cannot be trusted to tell the truth. It is literally impossible to believe them if they were to say things were fine. Why? Because if they were NOT fine, saying so would cause a panic which they intend to avoid. - Paul Milne

Two years ago, it was inconceivable to me that our leaders could handle this problem as badly as they have. Especially an administration that has engaged in damage control as much as the current one has done should have understood the need to get in front of public expectations. Instead we have guaranteed that nearly all people will be caught by surprise when even the most optimistic possible scenarios unfold... People, at least some large percentage of them, will demand revenge for the disruptions to their lives. If it is not clear who should be punished, a scapegoat goat will be found. It could be dangerous times. Politicians will be busy taking the public pulse and riding whatever crests they find in the waves. In the search for 'Justice,' actual responsibility will not be important. If someone can make a good case that some particular cause existed for our problems, and has a good-sounding story for how that cause should be dealt with, it will have great public appeal.... Current leadership will be delegitimized. - Jay Golter [Northern Virginia Year 2000 Community Action Group]

Unfortunately, political leaders told us that all is well, not to worry, but their systems will incur some of the worst Y2K failures. In the midst of these failures, pleas for millions of dollars and requests for forbearance while they scramble to replace failed systems will not be well received. The failures in Federal government systems will be especially threatening. - Ralph Daugherty [programmer]

Did you notice that if you.... compare the status information and requirements for success from 1997 and 1998 with those of today, it looks like we're talking about two entirely different stories? That's because part of the story is gussied up to meet modern illusion standards, and the other is real. Which is which? As I see it, there are only two possible conclusions to the comparison. (1) Either most of the 1997 and 1998 government and business reports, and the requirements deemed necessary for success in 2000 were lies... or (2) Most of the government and business status reports and prognostications now are lies. - Bonnie Camp

The notion that preventing panic was more important than solving the problem has won out. I hope that was a good decision; I don't think it was. - Leon Kappelman [professor, University of North Texas]

And yes, governments probably do lie on occasion, they have to, just like parents do. However, if they lied about Y2K readiness, that would be the biggest collective lie in the history of mankind. I find that hard to believe. - Rogier Gerritzen

Since Comrade Klinton said we are 99.9 percent compliant, I am really scared, that means that the government is probably at best about 5 percent compliant. Of course the bunkers state and federal governments have are to improve the landscape. - Frank J. Surface

I work in the State of Texas Year 2000 project office. Part of my job is to monitor several state agencies and universities.... I'm confident that there's not much "spin" in the reports they gave us.... By November 20.... nearly all of our systems, mission-critical or not, were done except for genuflecting to the gods of bookkeeping. By "done" we mean code, hardware, data, telecommunications, etc. has been put back into production. By "bookkeeping" I mean obtaining sign-offs from department heads, sending the results to the project office, and things like that.... It looks like we'll spend only 70% to 80% of what we originally budgeted. Much of the "shortfall" (ha! imagine government spending LESS than its budget--is this a great state or what?) is due to overestimating the difficulty of the project. Most agencies did remediation with in-house personnel. Apparently once they got into a regular routine with a set of standard date-processing routines and solutions, it took less time than they expected, hence cost less.... The work got done, and we're experiencing very few residual failures at this point. There are certainly no show stoppers to date. That's why I don't find it difficult to believe that, on the whole, the Feds are telling us the truth. I don't have trouble believing utilities, either. All of what they're saying matches what we've experienced here. - Nicholas Osborn

And in fact the experts tell us it's unlikely that anybody's lights are going to go off immediately anyway -- or telephone -- that what's going to happen in developing countries, if they have difficulties, is they are going to lose the ability to monitor and manage their system. And so power and telecommunications challenges in those countries will occur and appear as a result of slow degradation of services that may take two or three days to appear.... I continue to believe that by the end of the first week in January we will have a very good picture of what's going on in the world. - John Koskinen

But in terms of the FAA systems, those.... were certified as compliant and completed last July, and we are satisfied that there is no risk in the FAA systems beyond the normal risk of glitches as we go forward. - John Koskinen

My advice to the American people is, you don't need to buy power generators. If you can get a good deal on a return, do it.... Just three months ago, over a million people still weren't assured that their power companies were prepared for the rollover into the new millennium. But today, with just 16 days until the year 2000, all customers across the country will be serviced by Y2K-ready power companies - Bill Richardson [Energy Secretary]

There is no reason to store or hoard dangerous fuels. - James Hoecker [head of the U.S. Federal Energy Regulatory Commission]

Where you are likely -- where we are likely to see failure around the world, it's going to be in the -- in kind of the classic infrastructure -- power, water, waste water, things of that nature. And there it's directly related to how mechanized and automated the control systems are. Most countries still have manual intervention for most of their infrastructure. And manual intervention is going to be fine, and they'll find ways to work around that. It's probably places, like the United States, where things are so automated we have forgotten how to do it, you know, by hand, that are going to have problems. - John J. Hamre [Deputy Secretary of Defense, December 16, 1999]

As we stand on the verge of the Year 2000, the vast majority of American citizens are totally convinced the Y2K computer problem has been solved. At this point, if even mild economic or social disruptions occur in January, most folks will be absolutely shocked, having been assured so often that such disruptions are impossible. The Y2K awareness battle is over. It wasn't even close. Those of us who have attempted to educate consumers about this situation have been clobbered. If it had been a football game, the score would have been 63 to 7, with Coach Koskinen working his game plan to perfection. Over the last several months, a relentless wave of spin control and outright disinformation from government bureaucrats and corporate executives have flooded the public with Y2K optimism.... I'd love to say the Y2K optimism sweeping our land is justified -- but I can't. The plain facts about Y2K-readiness paint a much more somber picture. I'm afraid Y2K optimism is based mostly on wishful thinking. And I'm afraid millions of citizens will be shocked -- shocked! -- to discover early next year that politicians and business leaders have been lying to them about Y2K. - Michael S. Hyatt

This is the Age of Clinton. Lies are the coin of the realm. - anonymous

The Year 2000 Readiness and Information Disclosure Act, Public Law 105-271, places public utility companies in a position whereby the truth about their Y2k preparations is no longer accountable to ordinary citizens. This new federal law makes Year 2000 information exempt from release even under the Freedom of Information Act! ....Citizens' rights are rarely suspended in a time of peace. However, the corporate special interests have used their muscle in Congress to assure that secrets about their Y2k readiness plans remain well beyond the level of ordinary public scrutiny. Despite public claims to the contrary, things may be so bad for them in fact that they felt it necessary to lean upon Congress to create an undeclared, de facto state of National Emergency. Will the new millennium bring with it the last days of civil liberties? The latest congressional actions seem to express our government's greater duty to promote the agenda of corporations then to preserve and protect citizens' rights. - Stuart H. Rodman

Except with the express consent or permission of the provider of information described in paragraph (1), any year 2000 statements or other such information provided by a party in response to a special year 2000 data gathering request made under this subsection- (A) shall be exempt from disclosure under subsection (b)(4) of section 552 of title 5, United States Code, commonly known as the "Freedom of Information Act"; (B) shall not be disclosed to any third party. - portion of Year 2000 Information and Readiness Disclosure Act (Public Law 105-271)

I work closely with several medium-sized companies in Maryland and Northern Virginia in the area of financial management. While working with the vice president of a firm the other day and his newly hired IT consultant, I learned.... this gentlemen's firm is not even ready for Y2K. They anticipate MAJOR problems in regards to inventory and customer database management. They will be working 24/7 until the end of the year to try to correct this....By the way, my father is a nuclear engineer for B.G. and E. as well. He works at Calvert Cliffs. He cannot disclose certain things to me but assured me that we will be in good shape for the new year in the nuke facilities. He and his people, however, are preparing a thirty day supply of the same things that us Y2K kooks are because many of them live in areas that get most of their power from facilities other than Calvert Cliffs!!! What does that tell you? - Tim Wells

Nowhere [globally] has any power utility found anything related to Y2K that could have shut off or disrupted power supply. The whole notion of blackouts is bogus. - Peter de Jager

I have a screwed-up Social Security statement in my hand. My mom got one. It is from the SSAdmin (Annual Benefit Statement). On the outside it says "Social Security is Y2K okay" On the inside the name and address and amount is correct but the MIDDLE two numbers of the social security number reads "33" instead of the correct middle two numbers. From what I heard on the news, that is what is happening to everyone's number, the middle two numbers are incorrect, but the first three and last four are correct. I hope this doesn't take long to correct.... - Ann Fisher

Just got another late hydro bill. They are still delivering them AFTER the due date. One consolation - I can pay it whenever the hell I feel like. They aren't charging any late fees. This message is printed in the body of the bill: "We apologize for the lateness of our billings. We fully appreciate the difficulties that this transition is creating and thank you for your patience and understanding." Twenty-one days to go, and they are still in "transition." - Jo Anne Slaven

As daily editor of Sanger's Review of Y2K News Reports, I was surprised at how often extremely important stories would be broken by obscure publications like Federal Computer Week, only to be ignored or downplayed by major news sources.... Most mainstream columnists have not soberly investigated Y2K, but have tended to simply dismiss Y2K fears as infantile or uninformed, while citing few or no facts in support of their own views. Particularly silly is the occasional article that approvingly cites some psychologist who holds that Y2K fears are neurotic, when the psychologist himself clearly doesn't know whether such fears might be well-founded. One can't find a better example of intellectual dishonesty about Y2K than that. - Larry Sanger

Today the Commerce Department reported that the "inventory-to-sales" ratio remained at 1.33 months for the third straight month, the tightest levels since the government began accumulating the data in 1980. The "inventory to sales" ratio for non-durable goods is only 1.07 months. This data, importantly, flies in the face of conventional wisdom that holds that businesses have been stockpiling inventories into Y2K. - David W. Tice

My final answer is that Y2K will be an event. I still assign a 70% probability to a Y2K-recession scenario.... I am raising the odds of a moderate recession from 25% to 30% and I am lowering the odds of a severe recession from 40% to 35%.... I still expect most of the problems will occur in global just-in-time supply chains in manufacturing and petroleum production.... The worst of the forecasted recession should occur during the first six months of the next year. - Ed Yardeni

I cite the current inability of DeeCee to pay teachers. Some teachers are getting multiple tens of thousands of dollars in error.... the problem started months ago, affected hundreds, perhaps thousands of people in my area. Possibly tens of thousands of people had first-hand knowledge of the problem. I'm including bank tellers, family members, close friends "Hey Joe, I gotta skip our Tuesday poker game, the d*mn school still hasn't paid me." Lots of people knew. This wasn't a secret, lots of people knew, but somehow, the news did not get out. In this case, the reality is that the IT system in DeeCee has been melting down for months. This is the reality. The delusion, shared by millions until a few days ago, is that everything is fine. There are no problems in DeeCee.... I do know that until the meltdown became public, there was lots of "doomer rumor" about DeeCee, the burnoff, etc. This "doomer-rumor" was countered by polly-happy-talk that all's well. After all, didn't DeeCee spend tens of millions of dollars? Isn't DeeCee the most important city in the world? So here we are, 867.... HOURS left [on November 26], not enough time for a good outcome. We know that DeeCee is going down. - Cory Hamasaki

I am a PTF distribution clerk in a size 22 office in N Texas.... About a month ago, my office received the version 3.03a upgrade for the CSBCS letter sorting machines. This upgrade is part of the overall Postal Remediation for Y2K. We have had nothing but problems since then.... The first time we tried to run the machines with the new version, we discovered that it was totally incompatible with the old system. It rejected all the plastic sorting cards we use to identify the separations in the sorted mail. It could not recognize the bar codes. We had to spent about 8 man-hours printing new bar-code labels for all the routes. It was a stupid, simple mistake that tripled the amount of time it took to process the mail.... The program is poorly done, poorly tested, and documented even worse. The technicians don't even have complete documentation of the bugs found in other offices. Each office is having to reinvent the wheel, over and over again. I know for a fact, that EVERY office which I have a family member in, that is large enough to have in-office automation, has had problems with the new software. I have received reports of the same in other offices.... this should have been fixed before it was released, but the PO was running out of time and had to go with it "as is".... Postal management does not take Y2K seriously. They spent $500 million on it, but they don't know what they're doing. We will do whatever we can next year, but manual sorting is MUCH slower. Alter your expectations accordingly. - anonymous internet post

Microsoft continues to lose the war for Y2K compliance. There are now 393 Microsoft applications that have had Y2K status changes since December 1. This includes some applications that recently finished testing. Of these 393 applications: 53 are rated compliant, 11 cannot be made compliant, 159 need updates that aren't available yet, 76 need new updates that are available, 4 don't process dates, 4 are considered compliant "with acceptable deviations", and 76 have changed status from compliant to "under revision". Among the products which require updates that aren't available yet, are Excel 95, Excel 97, Excel 2000, and all versions of Office 2000. Windows Media Player used to be listed as compliant, now it's "under revision". This is a component of all recent versions of Internet Explorer.... This is as of 10:00 am today, 12/9/1999.... Bottom line: if you use Microsoft software on your PC or server, you are probably not Y2K compliant, even if you thought you were and verified that with Microsoft as recently as 10 days ago. - Jerry Heidtke

The IMS 'limited user base' may be irrelevant; some IMS users are key to the world economy. For example: I work for the company which has been doing the remediation for 'Maersk Line', the world's LARGEST container freighting organisation. A large portion of the data on the world's freight (what ship it's on, which container, what's inside the containers, is the freight hazardous, what port is it destined for etc..) is contained in IMS DL/I databases. Fortunately.... a good job has been done of remediation: This included upgrading to IMS 6, and adding 'windowing' code to process 2-digit dates; testing was completed some time ago. But we wait in hope that 'toast' is not the only commodity to be shipped around the world next year. - Risteárd Mac Thomáis

My father (Ken Borzel) works for Northwood Pulp Mill in Prince George, BC, Canada. Last Sunday (5 Dec/99) Northwood tested its ability to isolate itself from BC Hydro, in a power-failure drill. Northwood has two backup turbines and both failed. The immediate loss of power for the mill precipitated a "crash shutdown" for the mill's 4 digesters, seriously damaging 2. In the words of the steam plant's chief engineer, "...we came within a gnat's whisker of rupturing the boilers and killing the entire mill crew." On a Sunday, that's approximately 200 men. I'm advised that the digesters operate at about 700psi. If one goes, "sympathetic detonation" of the rest would flatten a circular area roughly 2 miles across. - Kurt Borzel [Nick's comment: At least, they tested it.]

I work for a large independent oil company with a market cap of about 6 billion dollars. We've made great progress on Y2K. But as of yesterday, we still had about 50 mission-critical systems (all embedded systems) that were not ready. Some are still in the assessment stage. That's an awful lot to repair/replace in 15 days. - anonymous

The Y2K activity in the mainframe operating system area is a bad sign.... The reason that IBM is issuing Year 2000 fixes labeled High Impact and Pervasive with 720 hours left [on December 2] is that users have just reported problems. The reason that users are reporting new problems is that they are finally getting around to exercising specific logic paths. This indicates that some firms are STARTING their testing with 1 month left.... If there are firms testing mainframes with 720 hours to go, they will not make the deadline of all deadlines with their APPLICATIONS. Unless they are very lucky or represent a pathological case, such as, the software was written 100% Y2K-compliant to begin with. Any shop that is still testing now, 720 hours left, will not make the deadline. Work stops in 10 days. People go on vacation. Even people who are at work are not working. In a large company, each department is treating itself to a party or shopping day. Nothing gets done in the last 20 days of December. Unless this December is different from all other Decembers, we better be done now. This is a come-as-you-are crisis. - Cory Hamasaki

It's pretty clear that my "prediction" of serious, visible Y2K-related fiscal-year problems on 4/1, 7/1, 10/1, etc did not turn out to be accurate. There were indeed some problems, but they typically involved financial reporting systems, not day-to-day operational, transaction-processing systems ... hence, not very serious, not very visible. Even though the Aug 22 GPS rollover phenomenon was not directly related to Y2K at all, I thought it would be a good indication of (a) how many of the GPS "systems" would be fixed in time, and (b) what kind of impact we would see from the GPS systems that were not fixed. Aside from an estimated 100,000 Japanese autos that were not updated in time, again the outcome seems to have been not very serious, not very visible. Whether this actually turns out to be a good prediction of the "real" Y2K situation remains to be seen; I suspect that a lot of other people.... who have pessimistic outlooks for Y2K will argue that GPS and Y2K are so unrelated that they should never have been mentioned in the same breath (or, in my case, the same book).... My outlook for 2000 itself -- as described in my "Year of Disruptions, Decade of Depression" essay -- remains unchanged. - Ed Yourdon

I am a software developer and network systems administrator with nearly 20 years experience. Mrs. Rimmer is a database administrator. We will be delighted if no serious consequences arise from Y2K-related problems over the next year. We take the potential risks of Y2K seriously but feel that there are just too many variables to make specific predictions. Our feeling is that it will be somewhere 'in the middle'. That is, things will be made worse than they needed to be simply because the vast majority is not taking Y2K seriously. We acknowledge that we could be wrong. We do not expect 'end of the world' scenarios, at least not on a large scale. But in the end, all disasters are local and Y2K could easily be the end of the world for some individuals caught by bad timing and lack of preparation. - Arnie Rimmer

We live on the very western edge of Wisconsin, about 20 miles east of Minneapolis. Age 41, married 17 years, with two boys age 13 and 16.... I'm a computer consultant (last 10 years). Been in the business for 25+ years, mostly on "big iron" (mainframes) and doing process automation / data collection / bar code type stuff. BSEE, and member of the IEEE. I know a plethora of languages... I get private emails from others in my business (in a variety of industries), the content of which would give most people a STROKE. Bottom line: I'd really, REALLY prepare for 3+ months.... - Dennis J. Olson

At the Food Lion grocery today [December 5] I saw a fellow who lives one block from me with two carts loaded down with gallons of spring water -- both top and bottom of the carts were packed with them. I went over to him and said, "Y2K?" and he said, "Yep".... I asked the checkout girl if she had noticed any changes in people's buying habits recently and she said, "You bet; we're selling an awful lot of bottled water." - Cody Varian

The main event is yet to come. We know now that problems can happen, that when they do, the firm covers it up as long as possible, and that in the end, whatever happens, happens. Cash and a monopoly situation can keep an organization running for a long time. In spite of that, I expect that we'll all know who was right by the end of March 2000. Perhaps the pollyanna perspective will prove to be correct. Unfortunately the recent system failures do not offer much hope. We'll see, 605 hours now [on December 7]. We'll know soon. - Cory Hamasaki

Y2K will be less like a winter storm and more like an El Nino. Y2K will not be a one- or a three-day event but will stretch through all of 2000 and into 2001. In the most likely scenarios, Y2K will come in waves at unpredictable times with unpredictable consequences.... the current official messages are encouraging a dangerous level of complacency. By trying to reassure the public and avoid panic, the current messages discourage active preparation and aggressive contingency planning. Despite all of the reassuring messages, the nation is not yet fully prepared for Y2K and additional urgent steps need to be taken. - Norman Dean [Executive Director, Center for Y2K and Society, November 23, 1999]

It really is embarrassing, a fifty million dollar bunker in the sky? What are they watching for? If anything happens, it will be on CNN, the Internet, ABC, or NEXIS. I'm guessing that they won't see a thing. On January 3rd, they'll declare Y2K a big nothing, close the bunker, everyone will go home. But then, a few days later, we'll see reports of incorrect bills, strange numbers on checks, late payments, wrong shipments. All things that we've already seen in the SAP installs. Kosky and the pollies are so clueless that they won't recognize the signs. If there are only a few problems, that's fine. If there are increasing problems, that's reason for alarm. - Cory Hamasaki

I've found over two dozen failures in the U.S. alone from reliable news sources. And there have been two Y2K failures in my sleepy little central Texas community (pop. 3,000) this month which have gone unreported by the local/regional newspapers. The folks that have had to suffer through these "glitches" have lost money, time and face. This is an international emergency representing a clear and present danger to life, property, and global stability. I'm not a doomer but I can tell when a situation is out of control. - Fred Remington

I went to the bank today and witnessed first-hand people withdrawing large amounts of cash from their accounts. There was this one particular woman, probably in her seventies, that apparently has been a long-time customer of the bank. When the teller quietly asked the woman if she was sure that she wanted to withdraw such a large amount, the woman was adamant. She was rather forceful in her response and attracted the attention of one of the managers. When asked why she would want to withdraw so much cash, the woman all but hollered, "Cuz it's MY MONEY!" Having voiced the unspeakable, several other customers voiced that they too were there to "get their money." I too, withdrew the amount that my family has planned for several months to have on hand... "just in case." But there wasn't any panic, no pushing and shoving, just a small line of people discretely taking care of their business. This scenario bothered me for two reasons. 1) The elderly woman's response screams of a history, hard times that she suffered through and doesn't want to suffer through again. And 2), that while people are going about their daily lives, "Business As Usual", they ARE paying attention. - Lisa Zachs

In a nutshell, it is very likely to be bad. There are too many things that can go wrong for all or even an overwhelming majority of them to have been fixed. Systems will fail...lots of systems, whether computers used principally for accounting or the ubiquitous embedded chips. While we focus our attention on whether we will have the convenience of continuous electrical power, though, we neglect the strong possibility that there will likely be serious social chaos in many pockets around the globe. The effects of the disruptions within these will inevitably spread, through one vector or another, causing imbalance elsewhere. Clearly, the change will not be sudden, but neither will it be unnoticeable. - Joe Bradley [economist]

I think it [distribution problems] will come three ways at three different times. The first is right after Christmas (27-28-29) when the Feds go into panic mode over preventing panic - which creates panic of course. Distribution systems are probably still okay then, but too many people want too much stuff in too short a time from too few suppliers and distributors. Next point is close to turnover, but right after turnover, when certain retailers simply "can't" operate (no power, no phones, no credit card scanners, no help, inventory POS system dies, store computer dies, whatever), but others can continue more or less as usual. So, the usual number of people are chasing about the same number of goods, but far fewer businesses can serve them. This would be Jan 3-4-5-6 maybe. Third point is when industrial fabrication and distribution screws up - now, a lot of people (all those who didn't prepare!!!!) are chasing an ever-decreasing number of available goods from an ever-decreasing number of retailers and still-surviving distributors. This would be after Jan 10-15, possibly continuing until mid-February? - Robert A. Cook

If I need any of my preps, I will be very surprised. If I need all of my preps, I will be stunned. Kind of like if my house actually burned down, or I actually had to do the Heimlich maneuver on someone. You prepare, but you really don't believe you will ever have to use it. Small businesses will definitely be having problems. The larger and the stronger may be okay. What happens to government will most likely be funnier than watching the three stooges. - Amy Leone

I'm at "2" out of "10". - Maybe a "2" plus or minus 2 would be more accurate. - I plan to wear a football helmet on January 1, 2000 to protect against planes falling from the skies. - I'll also have extra cash, water and food -- expecting a "2" doesn't necessarily mean preparing for a "2" -- "prepare for the worst, hope for the best" is more logical. - If I get a $10,000 phone bill for January, I will not pay it. - And I'm a doomer compared with everyone I know! - Richard Greene

My conclusion: it doesn't matter how good you are at scientific analysis, predictions about Y2K will never be more accurate than the kind of analysis the CIA does, when it tries to predict what a country's politics will be like five years out. It is purely seat-of-the-pants stuff, backed up by whatever data you can glean out of the noise. - Brian McLaughlin

This is a psychological issue. For the great majority to admit, or see, that there are basic problems with the machines that allow them to "do" what they do, they must admit that their very way of life is threatened. And it has also been a bit of a fraud. Conceptually, it is too difficult for most to admit to. Think of your children. Imagine the response you would get if you told them that some of their toys would not be playable next week, because the people that made them had made a mistake in building them. They could not understand. Children play with their toys, that is their work. People work with their computers and machines, that is their play. Not a lot of difference. - Gary Elliott

It is difficult to imagine an economy that continues to contract for a long time, but it has happened at regular intervals throughout economic history. It is the past 50 years that has been unprecedented, mostly because of globalization, in my opinion. The bigger the economy the more difficult it is to get a cascade of business failures started. The broader the market, the broader the spread of risk. But once it does start, globalization and increased interdependencies will also make the cascade very difficult to arrest. - Tom Benjamin [economist]

The true danger of Y2K is economic recession or depression due to public panic and a subsequent loss or personal or economic freedoms through government intervention. - Ken Decker

I am sure the way we will handle the problem here will be calm. Even if an intensive care unit does not work properly and the guy dies, this will not be a problem, because if he has to die, he will die. No one will say the Y2K killed him... They will say it was God's will. - Ehab Mostafa Elwy [Egypt's Y2K czar]

Here, less than 20% of the people know about Y2K.... We don't think anyone needs to know about Y2K except the government, the police and the military. - Djamh ari Sirat [head of Indonesia's national Y2K task force]

STOCK MARKET OUTLOOK

Is the stock market trying to tell us something about Y2K? Possibly. The Internet-stock mania continues unabated, and money pouring into a few favored big-chip stocks keeps the popular averages propped up. This is a testimonial to Greenspan's goosing the money supply to get the banks through Y2K.... the majority of stocks are in decline, so the extra money goes into momentum-chasing games.

Meanwhile, the Dow Transportation average (and transportation stocks generally) are closing in on a yearly low.... while energy stocks have been rising, and oil supplies are tight. Is this simply because demand for energy is high in a roaring economy.... or is it because supplies will shrink next year, and prices will soar?

Similarly, the Dow Utilities average is regularly touching a multi-year low.... interest rates are clearly headed higher. Is this because the Fed is tightening? No.... the Fed is just following the curve here; the market tightened ahead of them some time ago. Is it because of intensified credit demand in a roaring economy? Possibly. But credit spreads..... Treasury bonds have not moved up much, appropriate for a "lender of last resort" which owns the printing press, while corporate (and utility) yields have moved up sharply.... indicate that a larger credit risk lies directly ahead.

As for the majority of stocks, which have been in a bear market since April 1998, their downward decline is accelerating. Now, stock markets don't always predict recessions.... but no recession has occurred in this (20th) century without most stocks first going into a dive. Especially in 1928-29 and 1972-73.

Certainly the dichotomy between the popular averages and the majority of stocks is the most extreme I've ever seen.... much worse that 1971-72.... while the dot-com craze is an order of magnitude worse than the "letter stock" fad of the late 1960s. And, though a crash could come at any time, the divergences, so far, just keep getting worse and worse. The "smart money" is apparently in as almost as much a stupor as the general public when it comes to Y2K, so maybe the market's Y2K message is not a strong one.... but the "smart money" certainly doesn't share the public's enthusiasm for the market mania. They're dumping stocks wholesale while playing games to keep the popular averages afloat.

The crash could come in the last week of December, but it's more likely that year-end portfolio window-dressing will keep the averages afloat into January, which is the next "window of opportunity" for a crash.

Previously I have painted a picture of a crash which follows the standard crash pattern: Stocks decline 11% to 15%, followed by panic where the market is closed for part of the day from a 3200-point decline (only 2000 points if it's less than two hours to closing time). But that was before we had crash and Y2K confluence, which enlarges the possibilities.

The crash scenario I still favor is: Early January (traditionally rally time), a "relief rally" from Y2K fears, just because the lights don't go out in large chunks of the country.... see, it was a hoax!, the incognoscenti will proclaim. By mid-January, when the "creeping crud" of Y2K really begins to bite, even the momentum-chased stocks will swoon 10% to 15%; then some seminal event (possibly a report that the Federal Reserve is draining from the system the Y2K money it added in November and December) will trigger panic. I expect to see the market closed for at least part of one day due to get-out at-any-price pressures.

But just as Y2K adds uncertainty to our lifestyles in 2000, it also adds uncertainty to the nature of the crash. Another possibility is that some sudden, Y2K-related (nonfinancial) event will trigger panic without the usual 10% to 15% preliminary decline; instant panic, with no chance for even those most clever of people who were expecting some sign of weakness first, to get out.

A third possibility is that stocks will do "the Kuwait thing", and simply not trade at all! Consider this scenario: On December 31, there is a little bit of a rush for extra cash; the ATMs run dry, and there are lines at some banks. There are also lines at gas stations as people top off. Maybe there's something to this Y2K stuff after all.... but, no matter, the market and the banks are closing early for New Year's, let's celebrate!

January 1 (Saturday): The U.S. is in great shape.... just little glitchy things so far. But overseas.... large swatches of Japan are without power, there was a mine explosion in Indonesia, a Ukrainian nuclear reactor is leaking radiation, SCADA failures in Iraq, Iran and Saudi Arabia have curtailed the flow of oil by two-thirds, and three Venezuelan oil refineries could not be restarted. Clearly, the impact of overseas failures threatens to drag the economy into recession.

January 2 (Sunday): There are scattered power outages throughout Europe, and widespread telecommunications failures. Several chemical plants in Germany and France remain closed "for safety reasons". Traffic lights in Rome fail, causing traffic chaos (so what else is new?). The Europeans announce a day's delay in reopening financial markets due to the "disruptions". The Tokyo market cannot open because the power in downtown Tokyo is out. There is a report in the Washington Times that Russia almost accidentally launched a barrage of nuclear-tipped missiles on the U.S. because of a control-center Y2K glitch. There are food riots in Indonesia, Sri Lanka, Pakistan, Egypt , Nigeria and downtown Los Angeles.

Sunday night: The "plunge protection team" meets to discuss keeping the U.S. stock, bond and commodities markets closed for awhile. An executive order closing the markets until further notice is prepared for the president to sign. A similar order was prepared for Ronald Reagan to sign during the 1987 Crash but Reagan, being a man of integrity and a believer in free markets, refused to sign it. What do you think Bill Clinton would do? Our criminal psychopath rapist president, eager to leave his mark in the history books? (And I'm not referring to semen stains.)

Monday, January 3: The markets are closed. You can't believe it! Friday, stock averages were at new highs. Monday, things are rapidly going downhill, and you can't get out! There was no warning!

Regardless of how the crash unfolds, I am certain of one thing: It will truly be spectacular.

I must confess, I remain totally baffled by most people's unwillingness to step out of stocks during the Y2K rollover. I can see not wanting to sell stocks where there would be taxes to pay; but in a tax-deferred account such as an IRA, 401(k) or 403 (b), where there are no tax consequences for switching, what harm is there in being in cash for the last few days of December, and the first few days of January, while we see how Y2K unfolds? Do people really believe they're going to miss a sudden, 40% rise in stocks during those few days?

Even people who think Y2K will be a bump in the road, or less, must concede the increased risk of experiencing Y2K disruptions, just based on the evidence and statements from even the most optimistic spokespersons that disruptions are inevitable. Investing is all about risk management (which is what took me out of stocks long ago); before the "new era" arrived, increased risk meant one should exercise increased caution.

I guess people expect the impossible: Somebody will ring a bell telling them when they should get out of stocks, just before the crash. I know that investment letter-writers are expected to do the impossible.... keep people in stocks right to the very peak, then get them out before the deluge. Can't be done. In every crash, there will be a very few (never the same few) who called it close, but most "experts" will drag their followers right into the maelstrom. Always has been true, by definition always will be.

Fortunately for me, in my own investing and writings, the only person I try to satisfy is myself. I follow my own risk-management rules for investing; though I couldn't have told you this beforehand, I know now, after the fact, that this strategy is guaranteed to keep me away from manias. I don't do bubbles. If that doesn't please you, if that's not what you're looking for, tough shit.

And on that cheery note, Happy New Year! ....and Happy New Millennium! (May you live in interesting times.)

PORTFOLIO REVIEW

The combined performance of the portfolios (including predecessors, but excluding "PIG" and TIAA/CREF) from January 1987 to the present, adjusted for the dilutive effect of added cash, is -6.02%, for a compound annual rate of return of -0.46%. For comparison purposes, from January 1, 1987 to December 17, 1999 (12.962 years), the CREF stock unit value (whose performance closely parallels the S&P 500 with dividends reinvested) has risen 563.63%, for a compound annual rate of return of 15.73%. WARNING: I am a rotten stockpicker. Prices shown are as of December 17.

A. "Phoenix" -real portfolio, begun on October 1, 1995.

SUMMARY - "Phoenix":

             Original cost (adjusted):   $ 4,998.21
             Present value:              $ 3,683.92
             Increase:                   $-1,314.29 [-26.30%]

The performance of this portfolio and its predecessors ("Hedger's Delight", "Present and Future Income", "Crapshooter's Folly") from January 1987 to the present is -16.47%, for a compound annual rate of return of -1.36%.

COMMENT on "Phoenix": After bringing the cash balance up to date, and after adjusting for the Y2K preparations cash withdrawal, the adjusted portfolio size is 61.779% of the portfolio before withdrawal. This ratio has been carried back to the "original cost", and also to the 1/1/1987 portfolio value, to be the basis for future performance calculations.

B. "Professors' Investment Group (PIG)" - investment club portfolio.

SUMMARY - "PIG":

             Original cost:         $ 9,024.00
             Present value:         $ 9,174.12
             Increase:              $   150.12  [+1.66%]

COMMENT on "PIG": The PIGs directed me to dump Pharmacopeia, as we have owned it more for than three years and it has gone nowhere. They also want me to buy Prudent Bear Fund (as a hedge against a crash), but Prudent Bear requires a $2500 minimum. Only today [December 17] was there enough cash in the account to meet the minimum investment requirement, from the last deposit which just cleared, so I will probably buy $2500 of Prudent Bear the week of Christmas. [Internet update: Bought $2500 worth at $3.74/share on December 20.]

The PIGs' Web page is at http://www.assumption.edu/HTML/Faculty/Kantar/WPigs.html

C. Roth rollover IRA - real portfolio, includes commissions:

SUMMARY - IRA:

             Original (1983-86) cost:  $ 8,326.19
             Present value:            $10,766.13
             Increase:                 $ 2,439.94   [+30.51]

The performance of this portfolio (including its predecessors) from January 1, 1987 to the present is -1.83%, for a compound annual rate of return of -0.13%.

COMMENT on IRA: There is no change from the last issue.

D. CREF Pension plan; I switch between indexed stock/bond/money funds:


Date           Sold            Bought
13Mar1992          stock @ 56.65      MM @ 13.41
29Apr1992          MM @ 13.48         bond @ 31.19
19Jun1992          bond @ 32.14       MM @ 13.55
29Jun1992          MM @ 13.57         stock @ 56.74
24Jul1992          stock @ 56.76      MM @ 13.61
29Oct1992          MM @ 13.72         stock @ 58.61
23Dec1992          stock @ 61.48      MM @ 13.78
16Jan1995          MM @ 14.83         equity-index @ 26.44
20Jan1995          eq-index @ 26.19   MM @ 14.84
30Oct1997          MM@ 17.24          bond@47.56 (27.17%)
30Oct1997          MM@ 17.24          i-i bond@26.12 (27.17%)
11Feb1998          bond@ 48.84        MM@17.52 (27.17%)
11Feb1998          I-I bond@ 26.23    MM@17.52(27.17%)
16Jun1998          MM@ 17.84          TIAA Traditional (45.87%)
23Sep1999          MM@18.99           I-I bond@27.56 (53.32%)
Values, 17Dec1999: stock, 197.83; MM, 19.22; bond, 51.86; inflation-indexed bond, 27.60;
TIAA current yield in SRA, 6.75%

Gain, 1988: 18.91%; 1989: 14.48%; 1990: 8.28%; 1991: 27.93%; 1992: 10.20%; 1993: 3.08%; 1994: 4.07%; 1995: 4.80%; 1996: 5.28%; 1997: 5.38%; 1998: 5.72%
Gain, January 1 through September 30, 1999: 4.129% (5.52% annual rate of return)
Total gain since January 1, 1988 (11.75 years): 185.35%
Compound annual rate of return: 9.33% (My long-term target: in excess of 15%)
Gain shown excludes the impact of additional monthly cash contributions.
Buying CREF stock on January 1, 1988 and holding it gained 472.60%, for a compound annual rate of return of 16.02%.

COMMENT on "Timer's Trend": Plenty of advance crash warning here.... we're still on the July 20 SELL signal, with the majority of stocks accelerating their decline to the downside.

______________________________  TIMER'S TREND  _________________________________
Wed 11 Aug 99        . #I  .       |10787.80  | . -             *
Thu 12 Aug 99        .# I  .       |10789.39  | . -             *
Fri 13 Aug 99        .  &  .       |10973.65  | .-                   *
Mon 16 Aug 99        .# I  .       |11046.79  | .-                     *
Tue 17 Aug 99        .  &  .       |11117.08  |-.                        *
Wed 18 Aug 99        .# I  .       |10991.38  | -                    *
Thu 19 Aug 99        .# I  .       |10963.84  | -                    *
Fri 20 Aug 99        .  I# .       |11100.61  |-.                        *
Mon 23 Aug 99        .  I #.       |11299.76  |-.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~*
Tue 24 Aug 99        .# I  .       |11283.30  |-.              *
Wed 25 Aug 99        .  I# .       |11326.04  + .               *
Thu 26 Aug 99        #  I  .       |11198.45  |-.           *
Fri 27 Aug 99        #  I  .       |11090.17  |-.        *
Mon 30 Aug 99     #  .  I  .       |10914.13  | .-  *
Tue 31 Aug 99      # .  I  .       |10829.28  |~.~*~~~~~~~~~~~~~~~~~~~~~~~~ 
Wed  1 Sep 99        .# I  .       |10937.88  | . -             *
Thu  2 Sep 99     #  .  I  .       |10843.21  | .  -         *
Fri  3 Sep 99        .  I  #       |11078.45  | . -                *
Tue  7 Sep 99        .  &  .       |11034.13  | -                 *
Wed  8 Sep 99        .# I  .       |11036.34  | -                 *
Thu  9 Sep 99        .  &  .       |11079.40  |-.                  *
Fri 10 Sep 99        .  I# .       |11028.43  + .                 *
Mon 13 Sep 99        #  I  .       |11030.33  |-.                 *
Tue 14 Sep 99      # .  I  .       |10910.33  | -              *
Wed 15 Sep 99      # .  I  .       |10801.40  | .-          *
Thu 16 Sep 99      # .  I  .       |10737.46  | . -       *
Fri 17 Sep 99        . #I  .       |10803.63  | . -         *
Mon 20 Sep 99       #.  I  .       |10823.90  | . -          *
Tue 21 Sep 99    #   .  I  .       |10598.47  | .  -  *
Wed 22 Sep 99      # .  I  .       |10524.07  | .  -*
Thu 23 Sep 99    #   .  I  .       |10318.59  *~.~~-~~~~~~~~~~~~~~~~~~~~~~~
Fri 24 Sep 99     #  .  I  .       |10279.33 @| .   -       *
Mon 27 Sep 99        #  I  .       |10303.39 @| .   -        *
Tue 28 Sep 99      # .  I  .       |10275.53 @| .   -       *
Wed 29 Sep 99       #.  I  .       |10213.48  | .  -      *
Thu 30 Sep 99        .# I  .       |10336.95  | . -          *
Fri  1 Oct 99      # .  I  .       |10273.00  | . -         *
Mon  4 Oct 99        . #I  .       |10401.23  | . -            *
Tue  5 Oct 99        #  I  .       |10277.11  | .-          *
Wed  6 Oct 99        .  &  .       |10588.34  | -                   *
Thu  7 Oct 99        #  I  .       |10537.05  | .-                *
Fri  8 Oct 99        #  I  .       |10649.76  | -                    *
Mon 11 Oct 99        .# I  .       |10648.18  | .-                   *
Tue 12 Oct 99     #  .  I  .       |10417.06  | .-              *
Wed 13 Oct 99    #   .  I  .       |10232.16  | .  -      *
Thu 14 Oct 99      # .  I  .       |10286.61  | .  -        *
Fri 15 Oct 99   #    .  I  .       |10019.71 @| .   *
Mon 18 Oct 99      # .  I  .       |10116.28 @| .    - *
Tue 19 Oct 99       #.  I  .       |10204.93 @| .   -     *
Wed 20 Oct 99        #  I  .       |10392.36  | .  -           *
Thu 21 Oct 99      # .  I  .       |10297.69  | .  -        *
Fri 22 Oct 99        . #I  .       |10470.25  | . -             *
Mon 25 Oct 99      # .  I  .       |10349.93  | . -           *
Tue 26 Oct 99      # .  I  .       |10302.13  | . -         *
Wed 27 Oct 99        #  I  .       |10394.89  | . -            *
Thu 28 Oct 99        .  I #.       |10622.53  | .-                   *
Fri 29 Oct 99        .  I  #       |10729.86  | -                       *
Mon  1 Nov 99        . #I  .       |10648.51  |-.                    *
Tue  2 Nov 99        . #|  .       |10581.84  + .                  *
Wed  3 Nov 99        . #|  .       |10609.06  + .                   *
Thu  4 Nov 99        .  |# .       |10639.64  + .                    *
Fri  5 Nov 99        .  |# .       |10704.48  |-.                      *
Mon  8 Nov 99        .  #  .       |10718.83  + .                      *
Tue  9 Nov 99        .# I  .       |10617.32  |-.                   *
Wed 10 Nov 99        .  &  .       |10597.74  + .                   *
Thu 11 Nov 99        . #I  .       |10595.30  |-.                   *
Fri 12 Nov 99        .  &  .       |10769.32  |-.                        *
Mon 15 Nov 99        .  &  .       |10760.75  |-.                        *
Tue 16 Nov 99        .  | #.       |10932.33  +~.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~*
Wed 17 Nov 99        . #I  .       |10883.09  + .             *
Thu 18 Nov 99        .  &  .       |11035.70  + .                *
Fri 19 Nov 99        #  I  .       |11003.89  |-.               *
Mon 22 Nov 99       #.  I  .       |11089.52  | -                 *
Tue 23 Nov 99     #  .  I  .       |10995.63  | .-              *
Wed 24 Nov 99        #  I  .       |11008.17  | . -             *
Fri 26 Nov 99        .# I  .       |10998.91  | . -             *
Mon 29 Nov 99      # .  I  .       |10947.92  | . -           *
Tue 30 Nov 99       #.  I  .       |10877.81  | . -         *
Wed  1 Dec 99        #  I  .       |10998.39  | . -             *
Thu  2 Dec 99        #  I  .       |11039.06  | . -              *
Fri  3 Dec 99        .  &  .       |11286.18  | .-                      *
Mon  6 Dec 99        #  I  .       |11225.01  | .-                    *
Tue  7 Dec 99      # .  I  .       |11106.65  | .-                 *
Wed  8 Dec 99       #.  I  .       |11068.12  | .-                *
Thu  9 Dec 99       #.  I  .       |11134.79  | . -                 *
Fri 10 Dec 99        .# I  .       |11224.70  | . -                   *
Mon 13 Dec 99       #.  I  .       |11192.59  | . -                  *
Tue 14 Dec 99      # .  I  .       |11160.17  | . -                 *
Wed 15 Dec 99       #.  I  .       |11225.32  | . -                   *
Thu 16 Dec 99       #.  I  .       |11244.89  | . -                    *
Fri 17 Dec 99        #  I  .       |11257.43  | . -                    *
========================================================================

"Timer's Trend" is based on 4% and 10% exponential moving averages of the New York Stock Exchange advance/decline line (that is, the ratio of advancing to declining stocks). There are many symbols shown above, but the ones that count are the braces: {, } = "Timer's Trend" (4% exponential confirmed by 10% exponential) SELL ({) or BUY(}) signal.

NEXT ISSUE - will appear about January 31, Y2K willing. /Nick Chase

Addendum to this issue: Congessman Stephen Horn's final report card:

Internet readers: I am still collecting Y2K quotes, as people weigh in with their opinions, but most of these will be "stale" by the next (end-of-January) issue, so in the interim I will be updating the "computer warmline" with these quotes, as I collect them. Look for them near the end of December.